Student 1099-Misc

[Gretel]

I know we had this subject over and over again. Student finished High School, has a job for 2 month (they issue 1099 Misc. $2,000), then moves on to the military.

I cannot make up my mind if I want to consider every job for a student (if 1099 has been issued) as SE tax due or, like in this case, take the position of a one-shot deal. Somehow it's hard to take that position with a student, since a student doesn't have yet established his line of work.

My real questions is this: Let's assume I safely can treat this income as line 21 income. I believe it also qualifies as Earned Income then, but my software (ProSeries) does not provide for this. If it doesn't qualify as Earned Income student will owe taxes since he cannot claim himself.

[AJsTax]

?

If you are referring to earned income in the contex of qualifying for the EIC, then won't work. A dependent of another can not qualify for the EIC.
That one is tough anyway, but he was not engaged in a trade or business, just did some side work for a couple months so could probably do line 21.
A few months ago I would have said it must go on Sch C if from box 7, 1099-misc., but with a lot more input and research on this I have changed my mind, but not of most of the others I work with or communicate with.

[Gretel]

Thanks. I am referring to the EIC but to the standard deduction for a depended, which is increased by earned income.

[David1980]

I think you're stuck with Schedule C & SE tax, or it being unearned income on line 21.

[Jesse]

I think you're stuck with Schedule C & SE tax, or it being unearned income on line 21.

This is what I thought too.

[kaimana]

For what time period did the student work? What type of work did the student do? How much is the total income? Did the student work for a sole proprietor?
I see no reason why it couldn't be ln 21 not subject to SE. Kaimana

[DonPriebe]

You wouldn't be asking these questions if the student were flipping burgers or doing landscaping for the parks department and received a W2. It's still a temporary job not in his eventual "line of work". Some "employer" is gaming the system to avoid his share of the SS tax.

[Gretel]

For what time period did the student work? What type of work did the student do? How much is the total income? Did the student work for a sole proprietor?
I see no reason why it couldn't be ln 21 not subject to SE. Kaimana

All I have is an "addi tape" with 5 dates and amounts totalling $2,000. They haven't even issued a 1099. Probably a sole proprietor but your guess is as good as mine. Work done in a quarry. The longer I think about it the more I am sure that this should be subject to SE unless TP wants to file this form to report that he thinks he should have been treated as an employee (no doubt, that this should have happened).

[kaimana]

tp should file a the form that informs the IRS of the employers actions. kaimana

[BHoffman]

It's too quiet around here. We need a rousing ditty:

http://www.youtube.com/watch?v=FywnbpC9i_s

_______________
Silence is not a replacement for a good rousing ditty.

[JohnH]

So if he wants to file the remployee reclassification form, his maximum savings will be $150 (the employer half of the Social Security tax). Subtract your fee of $80 - $100 for the additonal work for preparing the 8919 and SS-8 and he's down to half (can both of these forms actually be prepared for only $80 - $100?). Then if any follow-up work is required to respond to IRS notices, he's under water and asking you why he did this.

[newbie]

For what time period did the student work? What type of work did the student do? How much is the total income? Did the student work for a sole proprietor?
I see no reason why it couldn't be ln 21 not subject to SE. Kaimana

tp should file a the form that informs the IRS of the employers actions. kaimana

If there is no reason it couldn't be ln 21 what would you inform the IRS of?

[BHoffman]

If there is no reason it couldn't be ln 21 what would you inform the IRS of?

We all have our little hobbies. Sometimes one can make a little whistleblower money and claim it on line 21

[FEDUKE404]

Plainly employment income

It's clearly a case of work income subject to SE tax.

It's almost as clear the "employer" is avoiding the usual taxes (FICA/FUTA/SUTA) on his workers, and it should have been W2 income in the first place.

And someone help me out on the argument about the "established in line of work" issue. While in high school and/or college I worked in a paint store and in a produce stand - hardly my line of work post college graduation. How could that not have been considered employment income?

FE

[AJsTax]

So if he wants to file the remployee reclassification form, his maximum savings will be $150 (the employer half of the Social Security tax). Subtract your fee of $80 - $100 for the additonal work for preparing the 8919 and SS-8 and he's down to half (can both of these forms actually be prepared for only $80 - $100?). Then if any follow-up work is required to respond to IRS notices, he's under water and asking you why he did this.

Wow, I think we are in a different business. Definitely in a different price zone in the country. We are looking at a $50 returrn here, with maybe $10 tacked on for the extra form. And to add extra for letters for something we prepared, how can you charge for this???
I am only half kidding here, the prices are actual for the area, the reasoning is not.